The Supreme Court of India has reserved its verdict on a pivotal legal battle concerning the fate of the now-grounded Jet Airways, following a plea by the State Bank of India (SBI) and other creditors. The plea challenges the National Company Law Appellate Tribunal’s (NCLAT) decision that upheld the resolution plan and approved the transfer of ownership of Jet Airways to the Jalan Kalrock Consortium (JKC).
During the hearing on Wednesday, a bench led by Chief Justice D.Y. Chandrachud, along with Justices J.B. Pardiwala and Manoj Misra, considered arguments presented by Additional Solicitor General N. Venkatraman, representing the appellant banks, and senior advocate Mukul Rohatgi, who spoke on behalf of JKC.
The conflict centers around the March 12 NCLAT ruling which not only supported the resolution plan of Jet Airways but also facilitated the transfer of its ownership to JKC within a specified 90-day period. Additionally, the NCLAT directed Jet Airways’ lenders to account for Rs 150 crore previously submitted by the consortium as a performance bank guarantee.
The appellant banks, including SBI, Punjab National Bank, and JC Flowers Asset Reconstruction Private Limited, have raised concerns regarding the JKC’s alleged default on payment obligations as set out in the resolution plan. According to the ASG, the consortium is significantly behind on its payment schedule, currently lagging by four years.
Countering these claims, Rohatgi, backed by Karanjawala and Company, argued that the delay in the resolution process was primarily due to the creditors themselves, not the consortium. He highlighted JKC’s recent financial actions, noting that the consortium had injected an additional Rs 100 crore into Jet Airways in September 2023, thereby fulfilling its total commitment of Rs 350 crore in equity as stipulated by the court-approved resolution plan.
Jet Airways, which ceased operations in April 2019 due to a severe liquidity crunch, has expressed intentions to relaunch in 2024 under its new management. The airline underwent an extensive insolvency resolution process during which JKC was selected as the successful bidder in 2021.
